Hong Life CalculatorsPresumptive taxation under section 58
| Who | Limit | Deemed profit |
|---|---|---|
| Resident individual, HUF or firm (not LLP) in business (old 44AD) | ₹2 crore turnover; ₹3 crore if cash receipts ≤ 5% | 6% of turnover received by bank/online modes + 8% of the rest, or actual profit if higher |
| Resident individual or firm (not LLP) in a specified profession (old 44ADA) | ₹50 lakh gross receipts; ₹75 lakh if cash receipts ≤ 5% | 50% of gross receipts, or actual profit if higher |
| Goods carriage owners (up to 10 vehicles) | — | ₹1,000 per tonne per month (heavy vehicles) or ₹7,500 per vehicle per month |
How the tax is calculated
- Deemed profit = 6% / 8% of turnover (business) or 50% of receipts (profession).
- Add other income. No further expenses or depreciation can be deducted.
- Apply the new-regime slabs: nil up to ₹4 lakh, then 5%, 10%, 15%, 20%, 25% for each ₹4 lakh and 30% above ₹24 lakh.
- Income up to ₹12 lakh is tax-free because of the rebate (with marginal relief just above). Add surcharge above ₹50 lakh and 4% health and education cess.
Example: a consultant with ₹40 lakh receipts → deemed income ₹20 lakh → slab tax ₹2,00,000 + 4% cess = ₹2,08,000.
FAQ
Can a freelancer use the 50% scheme?
Yes, if the work is one of the specified professions in the Act (for example legal, medical, engineering, architecture or accountancy) and gross receipts are within ₹50 lakh, or ₹75 lakh when cash receipts are 5% or less.
Is 44ADA still valid after 1 April 2026?
The Income-tax Act, 2025 replaced the 1961 Act from Tax Year 2026-27. The presumptive schemes formerly in sections 44AD, 44ADA and 44AE are now in section 58, with the same rates and limits.
Do I get the ₹75,000 standard deduction on presumptive income?
No. The standard deduction applies to salary and pension, not to business or professional income.
Sources (checked 10 November 2026): Income Tax Department – section 58, Income-tax Act, 2025 (incometaxindia.gov.in); Finance Bill 2026 Memorandum (rates for Tax Year 2026-27 unchanged, section 202 slabs). Estimate, not tax advice.